GGP were duped by Novus 12 months ago when they did their last entitlement issue. They effectively granted Novus a free option - at time of allotment if the share price was below the issue price, then let the poor old GGP shareholders who applied for shortfall have the lot. If the share price was above the issue price at time of allotment, the Novus takes most of the shortfall, seels them for a profit and keeps the bonus cash over and above all their fees. This is not normal in such underwritings - I have participated in many entitlement offers and invariably shareholders were allocated shortfall first.
I read the offer document this time trying to work out if GGP again granted Novus a free option. I couldn't work it out (no doubt Novus put together the offer document and disclosed the minimum they had to when it came to underwriting details).
12 months ago we GGP shareholders who applied for shortfall were given 20.69% of what we applied for, and Novus took a windfall profit on most of the shortfall. If that happens again, we as shareholders should inundate the company with complaints and ensure they never use Novus again for capital raising.
GGP Price at posting:
2.2¢ Sentiment: LT Buy Disclosure: Held
